India’s re-fashioned 2G licence auction set to face delay

The rules governing India’s upcoming 2G auctions are unlikely to be finalised in time for an August 31 deadline, India’s Department of Telecom’s Inter-Ministerial Group (IMG) has warned.

In a meeting last week, the IMG said that the failure of the Empowered Group of Ministers (EGoM) to reach agreement on whether to back controversial plans for high base prices for spectrum – and how operators should continue to pay for existing spectrum – has delayed the process.

According to a Business Standard report, the IMG says that an auctioneer can be selected only after the final guidelines were issued, adding the selected auctioneer would require adequate time for designing the auction, owing to its complexity.

The process is complicated further still by the fact that the EGoM currently lacks a senior minister to lead the body with the power to make decisions. The original incumbent, former finance minister Pranab Mukherjee, resigned from the cabinet to contest the presidential elections, while his successor – agriculture minister Sharad Pawar – quit as head of the EGoM after just three days.

The Telecom Regulatory Authority of India (TRAI) has recommended a base price for a nationwide licence at INR36.22 billion (US$689.6 million) – over ten times higher than the prices set in a 2008 auction for the same airwaves.